State of 8(a) Program is Debated at Summit The 8(a) program is suffering from the impact of federal procurement reform, inadequate technical assistance for companies and lack of training to prepare participating companies for “life after 8(a),” according to participants in a Minority Business Summit in Washington organized by Democratic members of the House Small Business Committee. “I think graduation from the 8(a) program is an inappropriate term,” said Anthony Robinson, president of the Minority Business Enterprise Legal Defense and Education Fund. “It’s ‘exiting’ the 8(a) program. It was meant to be a business development program (but) we have systematically taken away all those tools that Congress gave to make it a business development program.” He said SBA’s management and technical assistance, the 7(j) program, has withered from lack of funding. In addition, he said 8(a) firms have suffered from neglect as a result of SBA’s decision to turn over to other agencies the responsibility for creating set-aside contracts. “SBA was supposed to serve as a prime (contractor),” Robinson declared. “Now it has delegated that authority…Until SBA regains its role as a prime contractor,” few 8(a) firms will be successful. The share of contract dollars flowing to 8(a) companies has been declining since 1995. Rep. Tom Udall (D-NM) said, “With procurement reform in 1995, we had SBA pull back and they delegate (contracting authority) to the agencies, and that’s when we saw the (share) plummet.” The House version of the SBA reauthorization bill, H.R. 2802, would cancel all of SBA’s memoranda of understanding on the 8(a) program, restoring SBA’s authority to choose contracts for 8(a) set-aside. There is no similar provision in the reauthorization bill passed by the Senate. Several speakers at the summit pointed to the difficulty of preparing for “life after 8(a).” Michael Jones, president of the Houston Minority Business Council, said there is “a cliff” at the end of a company’s 8(a) certification. “These folks come from a sheltered market (in the program) and they don’t know squat” about full and open competition, complained Steven Sims, vice president of the National Minority Supplier Development Council.” Robinson of MBELDEF said set-asides for small disadvantaged businesses would be “extremely important” in smoothing the transition for graduates of the 8(a) program. The Bush administration has refused to reinstate the SDB set-asides, which were suspended after the Supreme Court’s 1995 Adarand decision limiting affirmative action. The administration points out that SDB’s market share in federal contracting has grown since set-asides were halted. Most advocates agreed that part of the problem for 8(a) firms is inadequate SBA training and business development programs. The agency’s management and technical assistance program, 7(j), “has been a joke for years,” said Steve Denlinger, president of the Latin American Management Association. “The funding has gone down and down.” A report by Democratic staff of the House committee says, “7(j) funding has been diluted to the point where the training offered for 8(a) firms is primarily through one-week executive development seminars…There is also concern that in FY 2002, 20% of the available 7(j) funding was used for SBA’s ‘matchmaking events.’” The House reauthorization bill would direct SBA to contract with management and technical assistance advisers to provide additional support for 8(a) firms. The reauthorization bill would also triple net-worth limits for owners of 8(a) and SDBs, to $750,000, and would give 8(a) companies first preference in all set-asides, at the expense of HUBZone firms. That bill “is the most significant change in the 8(a) program in 15 years,” said Rep. Nydia Velazquez (D-NY), the committee’s ranking Democrat. The Senate bill contains no comparable provisions for the 8(a) program; differences will have to be worked out in a conference committee once the House bill is passed. HUBZone backers in the Senate have said they will fight to continue the equal treatment now given to 8(a) and HUBZone companies and will resist a House proposal that would require all HUBZone business owners to be disadvantaged individuals. More than 70 minority business leaders from around the country participated in the summit, held on Capitol Hill Oct. 1 in connection with Minority Enterprise Development week.